Five Calls To Make Now That You Own Facebook Shares

Don’t worry about buying into the Facebook IPO disaster. The stock market is a university where you pay by the trade to learn how to build your wealth investing.

It might feel like an expensive lesson, but if you learn from it, it will turn out cheap in the long run. That doesn’t help much as you sit holding the bag.

What now?

There is no simple answer, it depends on your situation and your mind-set.

1. You have no portfolio strategy; you heard Facebook (FB) was going to zoom on day one, so you put a big percentage of your free cash into the stock as soon as it opened, in the hope of making some money from a flip.

Answer. Sell.

You can’t afford to lose this money. Your reason to buy was extremely skimpy and it turned out wrong. Don’t reformulate your reason to own the stock. Get out. There are lots of ways to make money in the stock market, but this isn’t one of them.

If you are going to trade, start a log of your trading; your reason to buy, the amount you bought and the result. Don’t forget your trading costs. Keep track of this as you trade and keep tabs on your losses. Make sure you benchmark your progress.

2. You have a portfolio, and you wanted to add a bit more "dotcom boom 2" spice to it. You think the IPO is a mess but you think it will pan out over the coming months.

Answer: Hold

You wanted more beta in your portfolio and this is going to certainly deliver that. Make sure it’s a diversified Beta and that you don’t have your high risk in the same sector, for example, don’t hold Zynga too.

3.You thought because Google is worth $600 a share why not Facebook? At $38 a share Facebook is cheap and bound to go to $100.